The ability of short interfering RNAs (siRNAs) to recognize mRNA is widely appreciated. siRNAs are entering Phase I trials, but their ultimate potential to impact human health is unclear. Like any drug candidate, many options will need to be explored to make duplex RNAs more potent and more versatile. We have observed that 21-base antigene RNAs (agRNAs) complementary to promoter sequences within duplex chromosomal DNA act as potent inhibitors of gene expression. Nuclear run-on assays demonstrate agRNAs block gene expression at the level of transcription. Most recently, we have discovered agRNAs that activate gene expression, opening up new avenues for using duplex RNAs in the laboratory and the clinic. Objectives: The objective of this proposal is to understand the properties of agRNAs, elucidate their mechanism of action, and characterize their potential for gene silencing or activation. In Aim 1, we investigate involvement of argonaute proteins in gene activation. In Aim 2, we examine the mechanism of RNA-mediated recognition of chromosomal DNA and develop chemically modified RNAs with improved potencies and specificites. In Aim 3, we develop rules for predicting agRNA activity by building a database correlating RNA sequence with silencing potency. For Aim 4, we propose computational and experimental strategies to identify microRNAs that share identity with transcription start sites for human or viral genes. Rationale: Our proposed research will characterize the mechanism of agRNAs. Our experiments will have a substantial impact on biomedical research because they will 1) expand the reach of RNA-mediated therapy to targets within chromosomal DNA, 2) develop rules for using agRNAs to control gene expression, and 3) examine the role of agRNAs in normal pathways for cellular regulation of gene expression. Our studies will significantly expand the potential for developing RNA drugs. Relevance to Public Health: Agents that increase or decrease gene expression have the potential to be developed as agents for treating most diseases. Our work is relevant becauses it describes a new strategy for increasing or decreasing the levels of proteins involved in disease. Specifically, our work will expand the options available for designing RNA drugs to reduce gene expression and fills an unmet need by providing a new strategy for designing RNAs to increase gene expression.